China’s commercial AI and semiconductor industries are key to its geopolitical power: report

The success of China’s commercial artificial intelligence and semiconductor markets will have a direct impact on the country’s geopolitical and military power, according to a new report.

The report, published on Feb. 6 by US think tank the Centre for a New American Security (CNAS), said that the technologies could insulate China from economic or political pressure from the US while increasing the “technological capabilities available to China’s military and intelligence community.”

“… China’s success in commercial AI and semiconductor markets brings funding, talent, and economies of scale that both reduce China’s vulnerability from losing access to international markets,” the report said.

China has set ambitious goals for the development of AI and other hi-tech industries. The country plans to move to a high-value economy through its Made in China 2025 initiative by developing its autonomous and electric vehicle, semiconductor, robotics, and aerospace sectors. The State Council, China’s cabinet, has also laid out plans for the country to become a world leader in AI by 2030.

According to the CNAS report, China has already shrunk the gap between Chinese and international AI and semiconductor companies. It added that the country should hold a defensible technological position in AI over the next five years as long as there are no significant shifts in US policy aimed at increasing competition.

Civil-military integration is a cornerstone of China’s national AI strategy, wrote Gregory Allen, report author and adjunct senior fellow at CNAS’ Technology and National Security Program, highlighting the extent of the cooperation between the private sector and the country’s military.

Citing China’s National Intelligence Law, Allen said that China’s tech companies are legally required to cooperate with China’s military and state security organs, in effect, giving the military access to emerging technologies developed by the private sector.

In 2018, China’s central government named search giant Baidu, e-commerce company Alibaba, social media and messaging firm Tencent, voice recognition company iFlytek, and computer vision startup SenseTime the country’s “AI champions.” Citing Sensetime executives, Allen said that the position gives the five companies assurance that they will not be threatened by competition from state-owned enterprises.

“The price of Sensetime and the other AI Champions being allowed to dominate these technologies is the Champions’ extensive cooperation with China’s national security community,” Allen wrote.